CERTIFICATE
This is to certify that the project report entitled ³A STUDY ON FUNDS FLOW ANALYSIS OF FOODS & INNS LTD, CHITTOOR.ana´ submitted by Mr.N. MANJUNTH(07751E0054) in partial fulfillment of the requirement for the award of the degree of ³Master of Business Administration´ under JNTU, Hyderabad, is a record of independent work under taken by him/her during the academic year 2008-2009. This project report has not been submitted earlier either in part or whole for the award of any other degree/diploma of any university.

PROJECT GUIDE Mrs. T. HIMABINDU, M.F.M. Department of MBA

DIRECTOR Dr .S.E.V.SUBRAMANYAM, M.B.A, PhD., Department of MBA

DECLARATION

I, N. Manjunath declare that the study conducted on ³A STUDY OF FUNDS FLOW ANALYSIS OF FOODS & INNS LTD, CHITTOOR´ is submitted by me to the department of business management, Sreenivasa Institute of Technology And Management Studies (JNTU), is of my own and is not submitted to any university or published at any time before.

PLACE: DATE:

N.MANJUNATH Reg. No.: 07751E0054

ACKNOWLEDGEMENT
I am very much grateful to FOODS & INNS LTD for allowing me to carry out my project work. I am thankful to D.S.N.MURTHY (Financial Manager) for giving me the permission to do my project work in Foods & inns Ltd. I would like to thank our principal Dr. T. SAIRAMA M.E., PhD, for his valuable guidance and enthusiasm shown to me. I owe a special thanks to our Head of the Department, SUBRAHMANYAM, M.B.A., PhD I would like to express my deep gratitude to my guide BINDU, M.F.M, for her guidance and motivation. Prof.S.E.V.

Mrs. T. HIMA

(N.MANJUNATH) Reg. No.: 07751E0054

STATEMENT OF THE PROBLEM
Funds flow statement summarizes for a particular period the resources made available to finance the activities of an enterprise and the uses to which such resources have been put. Funds flow statement is based on accrual concept of profit. The Company prepares a statement of funds flow to cater Purchase of fixed assets and investments, redemption of debentures and preference shares and repayment of loans, payment of dividend, payment of tax, and increase in working capital. It is the responsibility of the organization to maintain a standard level of funds flow neither excess or deficit.

FINANCIAL MANAGEMENT

Management of funds is an important aspect of financial management. Management of funds acts as the primary concern whether it may be in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.

cost and control. "Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm". 3. Financial management constitutes risk. Funds flow statement is called by various names such as sources and application of funds. It is a statement showing sources and uses of funds for a period of time. Funds issued by the issue of equity shares are the best from risk point of view for the company as there is no question of repayment of equity capital except when the company is under liquidation. where got. statement of changes in financial position. ³A statement of sources and applications of funds is a technical device designed to analyze the changes in the financial condition of a business enterprise between two dates´. funds received and
. The term flow of funds means transfer of economic and values from one asset of equity to another. If the effect of transaction results in the increase of funds it is called source of funds and if it results in the decrease of funds it is known as an applications of funds the term flow of funds refers to the movement of funds in the working capital it is said to be a source or inflow of funds and if it results in the decrease of working capital. Funds procured from different sources have different characteristics in terms of risk. summary of financial operations.According to Phillippatus. movement of working capital statement movement of funds statement. The cost of funds should be at minimum for a proper balancing of risk and control
MEANING AND CONCEPT OF µFLOW OF FUNDS¶
The term µflow means movement and includes both µinflow¶ and µoutflow¶. cost and control.
PROCUREMENT OF FUNDS
1. where gone statement. As funds can be obtained from different sources so procurement of funds is considered as an important problem of business concerns. it is said to be an application or outflow of funds. Flow of funds is said to have taken place when any transaction makes changes in the amount of funds available before happening of the transaction. 4.
MEANING AND DEFINITION OF FUNDS FLOW STATEMENT
Funds flow statement is a method by which we study changes in the financial position in the business enterprise between beginning and ending financial statement dates. From the cost point of view equity capital is most expensive source of funds as dividend expectations of shareholders are normally higher than prevalent interest rates. sources and uses of funds. 2. where came in and where gone out statement. 5.

LIMITATIONS OF FUNDS FLOW STATEMENT
The funds flow statement has a number of uses. how ever it has certain limitations also which are listed below: 1.
3. It can not reveal continuous changes. We can easily realize the impact of profit & loss account if we remember that revenue is an inflow of assets (or outflow of liabilities) and expenses are an out flow of assets (or inflows of liabilities). It is not an original statement but simply. Changes in cash are more important and relevant for financial management than the working capital. arrangement of data given in the financial statements. Net profit can also be computed by comparing the balance sheet at beginning and the end of the period.
Generally.
RELATIONSHIP BETWEEN BALANCE SHEET AN AND PROFIT & LOSS ACCOUNT
The balance sheet and the profit & loss account are not two separate and independent statement but they are related to each other. This fact
. funds statement etc. It should be remembered that a funds flow statement is not a substitute of an income statement or a balance sheet. funds generated and expended statement. The profit & loss account is a link between the balance sheet at the beginning of the period and the balance sheet at the end of the period.
2. the profit and loss account is prepared to compute net profit. It is essential historic in nature and projected funds flow statement cannot be prepared
5.disbursed statement. 4. It provides only some additional information as regards changes in working capital.

Thus. However.emphasizes the role of the profit and loss account as a link between consecutive statements of financial position. liabilities and owners equity for a business firm as on a specific date. The earning capacity and potential of a firm are reflected by its profit and loss account. It is a flow statement. liabilities and owners equity at a point of time.
LIST OF NON CURRENT OR PERMANENT CAPITAL ACCOUNTS
Non-current or permanent liabilities Equity share capital Preference share capital Redeemable preference share capital Debenture Long term loans Share premium account Share forfeited account Non-current or permanent assets Goodwill Land Building Plant & Machinery Furniture & fittings Trade Marks Patent rights
. More especially balance sheet contains information about resources and obligations of a business entity and about its owner¶s interests in the business at a particular point of time. The balance sheet is a stock or status statement as it shows assets. creditors. The profit and loss account is a ³score board´ of the firms performance during a period of time. Net profit (or net loss) for a period is equal to the change in owner¶s equity during that period. In the language of accounting balance sheet communicates information about assets.
PROFIT AND LOSS ACCOUNT
Balance sheet is considered as a very significant statement by bankers and other lenders because it indicates the firm¶s financial solvency and liquidity. Thus. the difference in beginning and ending owner¶s equity is the net profit (or net loss). particularly bankers and financial analysis in India have recently started paying more attention to the firm¶s earning capacity as a measure of its financial strength.
BALANCE SHEET
Balance sheet is the most significant financial statement. as a starting point. as measured by its resources and obligations. It provides a snapshot of the financial position of the firm at the firms accounting period. the balance sheet reveals the firms financial position on specific date. It indicates the financial condition or the state of affairs of a business at a particular moment of time. The generally accepted convention is to show one year events in the profit and loss account. Since the profit and loss account reflects the results of operations for a period of time.

hence the funds flow statement is prepared by comparing two balance sheets and with the help of such other information derived from the accounts as may be needed. Statement or Schedule of changes in working capital funds. An increase in current liabilities decreases working capital and. Working capital = Current assets ± Current liabilities 1. b. 3. SIGNIFICANCE AND IMPORTANCE OF FUNDS FLOW STATEMENT
y It helps in the analysis of financial operations. Broadly speaking the preparation of a funds flow statement consists of two parts: 1. 2. c. 2. 4. An increase in current assets increases working capital.
USES. d. Proposed dividend(may be current/non-current liability)
Prepaid expenses
Accrued incomes
PROCEDURE FOR PREPARING A FUNDS FLOW SATEMENT
Funds flow statement is a method by which we study changes in the financial position of a business enterprise beginning and ending financial statements dates.
.Provision against current assets
Inventories or stocks such as a. Raw materials Work in process Stores and spares Finished goods
Provision for taxation if it does not amount to appropriation of profits. A decrease in current in current increases working capital. A decrease in current assets decreases working capital. Statements of sources and application of funds.

It acts as a future guide. It helps in a appraising the use of working capital. It helps in the proper allocation of resources. It helps in the formation of realistic dividend policy.y y y y y y
It throws light on many perplexing questions of general interest.
STATEMENT OF SCHEDULE OF CHANGES IN WORKING CAPITAL PARTICULARS PREVIOUS CURRENT EFFECT ON WORKING YEAR YEAR CAPITAL INCREASE DECREASE CURRENT ASSETS Cash in hand Cash at Bank Bills receivable Sundry Debtors Temporary investments Stocks/Inventories Prepaid expenses Accrued Incomes Total Current Assets CURRENT LIABILITIES Bills payable Sundry creditors Outstanding expenses Bank overdraft
. It helps knowing the overall credit worthiness of a firm.

Total_______
Applications: a) Payment of share capital b) Repayment of institutional loans. Trading profit or funds from operations. Issue of Debenture C. c) Redemption of debentures d) Purchase of Investment and other fixed assets. Sale of Investment and other fixed assets E. Institutional Loans D. Issue of share capital B.Short-term advance Dividend payable Proposed dividends* Provision for taxation* Total current liabilities Working Capital (CA-CL) Net increase or decrease in working capital * May or may not be a current liability
PROFORMA OF A FUDS FLOW STATEMENT
Statement of Sources and Application of Funds
Sources:
Rs A.
.

Collectively.e) Non-trading payments
Total_______
INDUSTRIAL PROFILE
BACKGROUND OF MANGO INDUSTRY
The lack of mango market development globally opens a large untapped opportunity for India to make an organized entry in the fresh mango and mango pulp market.4 thousand metric tons. but also imported 2. Additionally.2 thousand metric tons of mango juice. Despite this large mango production. mango is a preferred fresh fruit within the Indian domestic market. The total market value of Indian mango and mango pulp represents 25% of the value of agricultural and processed food products exported by India. India is a minor exporter of mango and mango products at this time. these observations indicate that. Data from 2001 indicated that India exported 3. This accounts for 41% of the estimated worldwide mango production of 25. India has the potential to create a long±term global market position and to capitalize on the fast growth of mango as a preferred ingredient for the natural package food industry.2 thousand metric tons of mango juice. During the five±year period from 1998±2002. Collectively. Data on exports of Indian mango pulp and juice products are more limited. these factors indicate a strong opportunity to position Indian mango and mango products to meet a growing international demand.
. the consumption growth for mangos in the United States and Europe has average 10±15% per year during the last 5 years.7 thousand metric tons of mango pulp. Moreover. or only about 0.4% of mango production during this time frame. Mango is in strong demand within the worldwide retail sector.56 million metric tons in 2003. including leading varieties like Alphonso. exports of fresh mangos from India averaged approximately 42. as well as globally. India is well positioned to capitalize on this opportunity with a very large national production of mangos. Data from 1995 indicated that India exported 37.

Education and training in Good Agricultural Practices and other sanitary standards. processors. PFID²F&V partnerships will also help identify and facilitate resources necessary for enhancing the mango supplychain such as cold storage facilities.
A further approach will target reduction of waste in the fresh mango chain by developing high±value mango products and enhancing processing capacity for the domestic market.
INDIA MANGO & MANGO PULP INDUSTRY DEVELOPMENT
Through partnerships with mango growers. These observations with mango are consistent with aggregate data available on Indian fruit and vegetable exports.despite being by far the world¶s largest mango producer. (Sources: India Ministry of Food Processing Industries and Rambo bank Report). and logistics management.
A recent report from the Indian Ministry of Food Processing Industries further details the overly complex supply chain and its contribution to costs and post±harvest losses. pesticide use in accordance with regulations. and a more efficient supply chain. increase farmer incomes. will lead to better yields. and development the farmer base at commercial and social levels. India exports less than 1% of its mango crop as fresh mangos or processed mango products. This report concludes that it is imperative to streamline the mango supply chain in order to reduce wastage and raw material costs. and Indian government organizations. Associated with this inefficient aggregation process is the application of numerous commissions as fresh agricultural products trade hands.
One barrier to efficient development of the Indian mango industry is an exceedingly complex supply chain. Ultimately. improved packing and grading facilities. these steps will help stabilize prices. Within the value chain. among others. PFID²F&V is working to strengthen the small and medium mango grower base by providing capacity building at all levels. Furthermore. testing facilities. Numerous stakeholders in India have expressed concern that this overly complex value chain is a hindrance to effective marketing of Indian mangos and mango products.
. a number of buyers and other aggregators operate at local Minds and APMC to assemble larger lots from the many small producers in any given region. export organizations. as well as employment of certification systems.

MANGO PULP INDUSTRY HOPES
o o o o o
Mango pulp production to reach 75. o PFID partnerships can assist mango growers and processors in developing an "India" brand image for fresh mango and processed mango products that meet
. now. notable results are beginning to show in the form on increasing contributions from partnership members. only 1% of the total mango production in India is exported. MSU/PFID-F&V.000 hectares in Krishna Giri district Mango pulp processed annually is 50. One reason contributing to this poor export performance is that overseas buyers have stricter standards than are currently accepted within the Indian domestic market.
GOALS OF INDIA MANGO MARKET DEVELOPMENT
Currently. Thiagarajan. o PFID partnerships in India can facilitate the development of a distribution network in European and other countries where the value realizations for mango and mango pulp are the highest. PFID²F&V will facilitate the development and implementation of quality and safety standards which will meet the demands of the export market. together with our two India-based coordinators.
o PFID²F&V will partner with relevant Indian organizations in establishing a
global image for the Indian mango starting with the establishment of quality standards and Good Agricultural Practices (GAPs) standards for India.000 tones Farmers have to go to Bangalore.000 tones by 2010 Mango is raised in 36. as there is no testing facility in Krishnagiri Farmers are not getting fair price. just over one year from project start-up. even if there is a rise in prices in global market
MANGO MARKET DEVELOPMENT
PFID-F&V India has continued to forge and strengthen public and private partnerships to the point that. recently met with the Agricultural Product Export Development Authority (APEDA) as well as the Federation of Indian Chambers of Commerce (FICCI) and the National Institute of Marketing Boards (NIAM) to follow up on each of their commitments to promote the Indian Mango Industry.
Dr.

to encourage commercialization and value addition to agricultural produce.
. USA. chocolates and cocoa products. sorting. meat and poultry. The division was set up in 1967 and since then has handled a wide range of products . consumption.such as Sesame Seeds. FOODS AND INNS Ltd has established it's presence as a reliable and competitive exporter to Coca Cola.
BACKGROUND OF FOOD AND INNS Ltd . grain processing and other consumer product groups like confectionery.
FOODS AND INNS Ltd began its fruit processing operations in early 70s. Processed Fruits etc. The predominant mango varieties grown in India make this product unique in country and abroad. milk and milk products. Far East.
COMPANY PROFILE
HISTORY OF FOOD AND INNS Ltd. The government has accorded it a high priority. mineral water. The Food Processing Industry sector in India is one of the largest in terms of production. for minimizing pre/post harvest wastage.consumer preferences. high protein foods etc. o After demonstrated success in developing a strengthening the market development of mangoes. India's food processing sector covers a wide range of products fruit and vegetables. plantation. fisheries. Western Europe. The food processing industry provides vital linkages and synergies between industry and agriculture.However fruit processing operations have been given a special thrust since the last season with an emphasis on developing strategic partnerships across the value chain especially fruit procurement and processing. and packaging which enhance shelf life of food products. Middle East etc. export and growth prospects.
FOOD PROCESSING
Food processing involves any type of value addition to agricultural or horticultural produce and also includes processes such as grading. alcoholic beverages. generating employment and export growth. with a number of fiscal relief¶s and incentives. PFID India liaisons can easily adapt this approach to the further development of other fruit and vegetable products in India.
The division combines people with vast experience in agric-trading with the FOODS AND INNS Ltd Group¶s credibility to justify its premier standing in the trading arena. Soya-based products.

The farming community is an integral part and forms the backbone of the organization. Consumer packs of Indian vegetables & catering packs for mango Chutneys. the mango belt in India.
PRINCIPAL MANUFACTURING DIVISIONS AND PRODUCT RANGE
DIVISION PRODUCT RANGE
Aseptic Canning Purees and concentrates of Mango. FOODS AND INNS LTD is encouraging farmers to mobilize the fruits directly to the factory. Guava & Papaya Paste.
FOODS AND INNS Ltd believes in empowering farmers by providing technical assistance from research institutes in the food industry to support the farmers in achieving better quality and higher yields by developing the gardening and harvesting techniques. In its effort to be a forerunner in the chosen areas of business in terms of best practices in quality and technology.
.Situated at Chittoor in Andhra Pradesh. FIL plans to benefit armors. thereby minimizing the fruit handling damages and high value realizations. frozen IQF vegetables & frozen Indian snacks like Samosa and Ptras. Guava & Papaya Institutional packs of mango products. the industry and the nation in a phased manner.
Frozen
Frozen fruit purees & IQF chunks. Concentrates and Fresh Fruits FOOD AND INNS Ltd was started keeping in mind the local farming community wealth. Further to educating farmers with latest horticultural techniques. FOOD AND INNS Ltd (FIL) is a 100% Export Oriented Unit (EOU) processing Tropical Fruit Purees.

IIM Professor Director
Mr.5 crores (USD1. Utsav Dhupelia .160 Crores (USD 16 MIO) giving the status of government recognized EXPORT HOUSE.
With the back up of technical and managerial support staff. innovative R & D and Lab facilities.Spray Drying
Fruit powder like Mango. Banana. D. Trivedi Mr.Utsav Dhupelia Mr. B.K.. Orange. Engineer Mr. looking after the routine affairs of the company.1 MIO) to Rs.No Name of the Director
1 2 3 4 5 6
Mr.C. the doyen guidance of Mr. the state of art technology implementation.B.Utsav coupled with the contribution of other directors. is the brain and brawl for taking the company¶s turnover from Rs.Raymond Simkins Mr.M.
PRODUCTS
. Tomato and beat root. a Chartered Accountant from U. Dalal
Director Solicitor Foreign Director Solicitor Ex.D.Maniar Mr.
BOARD OF DIRECTORS
S. the company is poised for a steady and continuous growth graph moving upwards in all Para meters. D.. M.

This place has been earmarked to host Integrated Food Complex of International standards. The plant has one of the India's single largest fruit processing lines -10 TPH ripen fruit processing with Aseptic Packaging.Market Presence
o o o o o o
European Union United States of America Canada Australia Middle East including Iran & North Africa Japan & South Korea
SAHER OF COUNTRIES MARKET
FACILITY
FOODS AND INNS Ltd processing facility is located in Chittoor. The facility currently has a tropical fruit Puree / Concentrate processing plant and the pack house for preparing the Fresh Fruits & Vegetables.
CUTTING EDGE TECHNOLOGY
FOODS AND INNS Ltd plant is equipped with state-of-the-art fruit puree processing aseptic filling line of SIG.
INITIATIVES SPAN THE FOLLOWING DISCIPLINES
. spread over an area of 15 acres. Italy to produce natural fruit pulps & concentrates.Mizzen.

o High speed advanced Mono block aseptic filling machine supplied by SIG
Mizzen.
PURE & CONCENTRATE FACILITY
.
o Special food grade self-leveling epoxy flooring to maintain optimum hygienic
conditions. o Integrated Enterprise Resources Planning system is in place to automate business processes and provide data for analysis and reporting.o PLC operated equipments for better control over monitoring and operations with
supervisory units.
o Curved corners and food grade epoxy painted walls to avoid dust accumulation
and to facilitate easy washing.
VALUABLE INDUSTRIAL EXPERTISE
FOOD AND INNS Ltd is backed with strong support and service from its team of highly qualified technical personnel and domain experts with perceptive knowledge and skill. o Two-stage sterilization to retain the natural flavor and aroma.
o Two stage washing of fruits to ensure HACCP quality requirement.
o Advanced high raise insulated roofing with double layer GI Sheeting with air
extractors to maintain temperature inside the plant. Powered by priceless hands-on experience these professionals are upgrading themselves continuously to identify and introduce improved and innovative product offerings that would delight customers worldwide and comply with the leading global quality standards. allowing a closer control on quality and operations.
o Utility lines are routed outside the plant to keep the interiors free from dust
accumulation.
EFFICIENT PLANT LAYOUT
o Minimal drop in power and steam transfer. o Straight-line process flow design to maintain the hygiene and control in
respective areas.

From there it is pumped to over head tank to supply to various locations of use.
VAPOUR HEAT TREATMENT
To enable Fresh Mango exports to countries like Japan and Korea. we are taking following steps at various locations of its use:
. It is as important to the fruit processing industry as to the living being.The fruit processing aseptic line is from SIG-Mazzini of Italy. bananas are processed along with tropical vegetables like Okra. Fresh fruits including mangoes.
PACK HOUSE
FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable processing facility from Grief. Bitter gourd etc. FOOD AND INNS Ltd has commissioned the VHT facility. Egg plant.
STAGE OF USE OF WATER TO THE BEST EFFECT IN OUR FACTORY
Our main source of water is bore wells. This ensures irradiation of the fruit flies in the fresh fruit. Without water there is no life on the earth. pre cooling chambers and cold storage to handle fresh fruits and vegetables. But. it needs a integrated& scientific approach for its management to use it so that undesirable wastage is avoided which helps us to save water for right utilization . Water from all bore wells is collected in a sump. Spain. It is a nature¶s gift. Lemon. therefore. The processing line is fully integrated and controlled by PLC. The water is potable. water is becoming scarce year by year due to increase n its consumption in industries & agriculture sectors & indiscriminate use /wastage by human beings. The facility also holds ripening chambers.
WATER MANAGEMENT
Water is an essential & precious natural resource. FOOD AND INNS Ltd is the first private organization to set up this facility in the country. The line has a capacity to process 10 metric tones per hour ripened fruits. To manage appropriately & conserve the water.

FOODS AND INNS Ltd expertise in the business and its contacts with Agents\Brokers. USA o SURE GLOBAL FAIR (SGF) o HALAL CERTIFICATION
CUSTOMER FOCUS
Loyalty and a strong relationship in business are built out of years of experience in a particular industry.
. Given our renewed emphasis on this product line we are strengthening relationships in key markets across the buyer spectrum. Off-shore logistical service providers has made the supply chain process extremely competitive. understanding unique requirements and delivering value to select global customers. Thrust of exports. End User.
FUTURE PLANS
y y y y
Development of the Indian market for foods and inns. This water is chl0rinated to control the contamination by continuous dosing of chlorine in the washing tub.
GERMANY o KOSHER BY STAR-K. Blender-bottlers. Expansion in 4th Aseptic manufacturing capacity. GERMANY o ISO 9001:2000 (QUALITY MANAGEMENT SYSTEM) BY TUV. The steam condensate of evaporator is recycled to boiler to save water & energy as condensate will have high temperature. Use of IT as a tool to further Business goals.o FRUIT WASHING
The water is re-circulated after filtration up to it becomes dirty.
o STEAM GENERATION
Water for boiler feeding is treated in water softener to reduce the hardness.
OUR CERTIFICATIONS INCLUDE
o HACCP (FOOD SAFETY CERTIFICATION) BY TUV.

SECONDRY DATA:
Secondary Data are already present one and it is second hand information.
. Annual reports of the company during 2004-2008. Financial statement of the company. From financial department of the company retaining to the last 4 years. 2. We collect through books magazines. journals & websites etc. the secondary data was collected from the company like
1.
In this study. 4. newspaper. Company records related to financial management.y Setting up of a Central R&D lab..
Backward integration for improved quality of raw materials using contract farming/ organic cultivation. 3.
METHODOLGY
The data is of two type:
y Primary data y Secondary data
PRIMARY DATA:
Personal interview and discussion was conducted for the collection of data.

To analyze the changes of financial position of Foods and Inns Limited enterprises between two dates. From various financial management next books.
OBJECTIVES
1. To know various needs for which funds were obtained during a particular period based in which these funds where employed.
5.5. To find out the sources from which additional funds were derived and the use to which their sources were put.
4. To analyze the changes in assets and liabilities from the end of one period of the time to the end of another period of time
2.
. To understand flow of funds in current or non-current accounts.
3.

It is a technical device designed to analyze the changes in the financial condition of the business enterprises between two dates.
This funds flow statement is a statement which indicates various means by which the funds have been obtained during a certain period and the ways to which these funds have been used during the period. The study is confirmed to find out the changes in the financial position of the Foods and Inns Limited between the beginning and ending financial date.
The term funds used here means working capital that is the excess of current assets over current liabilities.SCOPE OF THE STUDY
The present study focuses as sources of funds and application of funds for a period of time.
Now a days it is being widely used by the financial analyst credit granting institutions and financial managers. It is an essential tool for the financial analysts and is of primary importance to the financial management. The basic purpose of the funds flow statement is to reveal the changes in the
.

It provides only some additional information as regards changes in working capital
3. It should remember that a funds flow statement is not a substitute of an income statement or a balance sheet. It helps in the formation of realistic dividend policy. It helps in appraising the use of working capital and finally it acts as future guide. The study based on the available annual reports and internal information only
. It cannot reveal continuous changes. It helps in the analysis of financial operations.working capital on the two balance sheet dates.
2.
4. It helps in the proper allocation of resources.
LIMITATIONS
1.

02.593
13. the main sources of funds are secured and unsecured loans. The financial position of FOODS AND INNS LTD in this particular year is good
STATEMENT OF CHANGES IN WORKING CAPITAL
TABLE 4.22.07.593
Interpretation:
Comparing the year 2004 and 2005 the statement of changes in working capital shows the increasing balance.19.968 75. The firm utilizing this fund for the purchasing of fixed assets.25.341 Increase in Working Capital 4.41.41.73.086 7.12.586 ----
Amount 5.54.060 53.507
13.90.2
Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Deferred Tax Assets Capital W-I-P Decrease in Working Capital
Amount Applications 2.81.54. As a result the funds flow statements.39.1
FUNDS FLOW STATEMENT FOR THE YEAR 2005
TABLE NO: 4.675 Purchase of Fixed Asset 27.963 10. differed tax asset and liabilities. In the particular year the current assets are increased then the current liabilities.56.TABLE NO: 4.3 Particulars 2005 2006 Effect on Working
.

debtors Cash & bank b/s Loans & Advances Investment Total C.97.72.47.A): Inventories S.74.84.82.86.608 2.310 10.733 6.28.47.252 9.Comparing the year 2005 and 2006 the statement of changes in working capital shows the increasing balance.04.526
2.248 31.78.13.36.40.60.20.27.
STATEMENT OF THE CHANGES IN WORKING CAPITAL TABLE NO: 4.12. differed tax liabilities.14.485 31.06.97.14.86.772 16.14. the main soureces of funds are secured and unsecured loans.49. As a result the funds flow statements.07.000 2.571 13.733 2.671 1.685 3.963
2. In the particular year the current assets are increased then the current liabilities.AC.77.85.L): Current Liabilities Provisions Total C.95.44.685 42.024 3.32.84.726 16.92.86.C) (C.28.055 2.911 18.011
1. The firm utilizing this fund for the purchasing of fixed assets and capital WIP and the financial position of FOODS AND INNS LTD in this particular year is good.31.38.C
12.95.011
FUNDS FLOW STATEMENT FOR THE YEAR 2007
.94.L Net Working Capital(W.222 2.12.06.16.55.L) Increase in W.75.00.30.28.61.938 14.12.04.485 6.793 28.180 1.758
12.90.89.5
Particulars 2006 2007 Effect on Working Capital Increase Decrease
Current Assets(C.29.43.918 13.98.A Current Liabilities(C.38.97.82.716 8.86.97.28.08.088 1.733 31.75.166 44.805 8.39.

213 2.28.44.11.75.98.69.41.17.71.939 14.884
Interpretation:
Comparing the year 2006 and 2007 the statement of changes in working capital shows the increasing balance.06.87.311 50.69.180 14. As a result the funds flow statements.61.250 8.08.12.71.911 7.024 19.12.783 Increase in Working Capital 2.87.00.84.32.29.93.13.TABLE NO: 4.130 96.81.75. The firm utilizing this fund for the purchasing of fixed assets and capital WIP and the financial position of FOODS AND INNS LTD in this particular year is good Particulars 2007 2008 Effect on Working Capital Increase Decrease
Current Assets(C.268 5.485
8.37. differed tax liabilities.132 77.30.42.726 4.685
.661 2.52.84. the main sources of funds are secured and unsecured loans.6
Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital
Amount 2.47. In the particular year the current assets are increased then the current liabilities.A): Inventories S.02.06.89.884
8.000 3.51.04.47.838 57.debtors Cash & bank b/s Loans & Advances Investment 16.67.778 -------
Applications
Amount
Purchase of Fixed Asset 5.685 2.33.77.616 Capital W-I-P 74.156 3.

4. The working capital is increased year by year except last year.
2.Then it fall down.Interpretation:
Comparing the year 2007 and 2008 the statement of changes in working capital shows the decreasing balance. the main sources of funds are secured and unsecured loans. The firm utilizing this fund for the purchasing of fixed assets.
. In the particular year the current assets are decreased then the current liabilities. Apart to this the surplus funds also increased.
5.Then in 2006&2008 the company used low funds for purchasing of fixed assets. As a result the funds flow statements. It is founded that the company is holding share capital stably.
3. The company receives the secured and unsecured loans indicate fluctuating position. The financial position of FOODS AND INNS LTD in this particular year is good
FINDINGS
1. The differ tax liability is increased in 2005-2006. differed tax liabilities. The company was highly purchased the fixed assets in the year 2005&2007.

7.6. The investment is increased year by year up to 2007.
. the statement shows decreasing working capital in the company. y Regularly use funds in purchase of fixed asset it make profitability. The working -in. In 2008 it is decreased.
SUGGESTIONS
y The company may increase their share capital it helps to get more strength in financial
position.
8. The working capital is increased in 2005 to 2007 with a low variation in the year the working capital will be decreased.progress rapidly increased by large variation with the amount. It is to require
raising short terms funds to solve the financial problems.
y In 2008.
y Tax liabilities should also be maintained in a standard manner.

I.CONCLUSION
It can be concluded that in FOODS & INNS PRIVATE LTD The working capital in increased year by year except last year.P.
.The over all performance of FOODS &INNS PVT LTD is very good. And its main sources of funds are deferred tax liability. secured& unsecured loans. The main applications of funds are purchase of fixed assets & capital W.